AOL UK up for sale

By Steve Malone

Posted on 2 Jun 2006 at 10:40

The Guardian reports that the ISP business is earmarked for sale: Time Warner to retain audience and advertising divisions.

AOL UK and other international businesses in France and Germany are up for sale, according to a report in today's Guardian. The paper reports that Time Warner has hired the Citigroup investment bank to find a buyer for the services.

It is understood that Citigroup is looking for a buyer or perhaps a partner in the access business and that Time Warner will retain the 'audience' division that deals with online content and advertising.

Although the company does not split out the performance of individual companies, it is thought that the British business has 2.2 million customers, including 1.3 million on broadband, and it is thought to be profitable. The UK arm has also been aggressively pursuing a divergence strategy by entering areas such as AOL Talk home telephony as BT unbundles local loops.

However, the parent organisation has been repositioning AOL world wide away from Internet service provision that is becoming increasingly commoditised and subscribers have moved away from the 'walled garden' approach of the original business. Instead, AOL is repositioning itself as being a content provider able to capitalise on the huge subscriber base and on the vast library of content within Time Warner itself.

In the past few months, AOL has sold a five per cent stake to Google partly in return for increasing control of the advertising business on its properties.